Study on Sourcing Opportunities in Indonesia

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Study on Sourcing Opportunities in Indonesia
Dec, 2019

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Table of Contents
▪ Executive Summary
▪ Indonesia – An Overview
▪ Indonesia – Country Overview
▪ Trade Statistics
▪ Export & Import Trade Statistics
▪ Top Export Categories
▪ Mineral Fuel
▪ Fats, Oils & Wax
▪ Electrical Equipment
▪ Precious Metals
▪ Automobiles
▪ Rubber & Rubber Products
▪ Industrial Machinery
▪ Footwear & Accessories
▪ Woven Apparel & Accessories
▪ Wood & Wood Products
▪ Ores, Slag & Ash
▪ Paper & Paperboard
▪ Knitted Apparel & Accessories
▪ Trade Agreements

Executive Summary (1/2)
© 2019 Dragon Sourcing. All rights reserved. 3
Category
HS
Code
2017
Export
Value in
USD
Billion
Indonesia’s
share of
Global
Exports
(2017)
Category‘s
share of
Total
Indonesia
Exports
(2017)
Top Products Top Export Destinations
Import Duty
into US
Import Duty
into EU
Mineral Fuel 27 27.9 2% 19%
Coal
Petroleum gas
Petroleum oils
China, Japan, India 0%
0% - EUR
178.85/
1000 kg/
biodiesel
Fats, Oils &
Wax (Animal/
Vegetable)
15 18.2 21% 13%
Palm oil
Coconut
Margarine
India, China, Pakistan
0% - 34.2
cents/kg
0% - 16%
Electrical
Equipment
85 8.1 0.4% 6%
Insulated wire & cable
Monitors & Projectors
Switch, Fuse & Relays
Singapore, USA,. Japan 0% 0% - 4.70%
Precious
Metals
71 6.4 1% 4%
Jewelry
Gold
Waste and scrap of precious metal
Singapore, Switzerland,
Japan
0% 0%
Automobiles 87 5.9 0.4% 4%
Motor cars
Tractor parts
Motorcycles and bicycles parts
Philippines, Thailand,
Japan
0%
0% -
15.40%
Rubber &
Rubber
Products
40 5.7 3% 4%
Natural rubber
Pneumatic tires (rubber)
Gloves, Mittens and Mitts (vulcanized
rubber)
USA, Japan, China 0% 0% - 2.20%
Industrial
Machinery
84 5.5 0.3% 4%
Printing machinery
Laboratory equipment
Refrigerators, freezers
Singapore, USA, Japan 0% 0% - 2.20%
Footwear &
Accessories
64 4.6 3% 3%
Footwear with uppers of leather
Footwear with uppers of textile materials
Footwear with uppers of rubber
USA, China, Belgium 0% - 48%
0% -
11.90%

Executive Summary (2/2)
Category
HS
Code
2016
Export
Value in
USD
Billion
Indonesia’s
share of
Global
Exports
(2017)
Category‘s
share of
Total
Indonesia
Exports
(2017)
Top Products Top Export Destinations
Import Duty
into US
Import Duty
into EU
Woven
Apparel &
Accessories
62 3.9 2% 3%
Women's or girls' suits
Men's or boys' suits
Women's or girls' shirts
USA, Japan, Germany 0% - 28.6% 0% - 9.60%
Wood & Wood
Products
44 3.9 3% 3%
Plywood, veneered panel
Wood strips and friezes
Builders' joinery and carpentry
China, Japan, USA 0%
Import
control of
timber &
timber
products
subject to
the FLEGT
licensing
scheme
Ores, Slag &
Ash
26 3.6 2% 2%
Copper ores
Iron ores
Niobium, tantalum, vanadium or
zirconium ores
Japan, Philippines, China 0% 0%
Paper &
Paperboard
48 3.4 2% 2%
Uncoated paper and paperboard
Toilet or facial tissue stock
Coated paper and paperboard
Japan, USA, Malaysia 0%
Import
control of
timber &
timber
products
subject to
the FLEGT
licensing
scheme
Knitted
Apparel &
Accessories
61 3.3 2% 2%
Jerseys, pullovers, cardigans, waistcoats
Women's or girls' suits
T-shirts
USA, Japan, Germany 0% - 32% 0% - 9.60%

INDONESIA – AN OVERVIEW

Country Ranking (out of 190) Comparison
Country
Indicators
IDN CHN IND VNM THA Explanation
Ease of
Doing
Business
72 78 100 68 26
A low numerical rank
means that the
regulatory environment
is conducive to business
operation
Time to
import
(days)
26 24 21.1 21 13 Calendar days
Document
s to import
(number)
6 3 5 8 5
Documents required for
clearance by
government ministries,
customs authorities, port
and container terminal
authorities, health and
technical control
agencies and banks are
taken into account
Indonesia – Country Overview
Source: World Economic Forum, data.worldbank.org, focus-economics.com, adb.org, indonesia-investments.com
Country Facts (2018)
Population 258.7 million
GDP
USD 932.4
billion
Annual GDP
Growth
5.0%
Country Indicators
Score/
Value
Global
Competitiveness Index
Score
4.68
Macroeconomic
environment Score
5.7
Labor Market
Efficiency Score
3.9
Domestic market size
index
5.7
Business
Sophistication Score
4.6
Note: Score reading: 1-7 (best)
▪ Political Outlook: Political stability is one of
the most significant driver in the economic
growth of Indonesia.
▪ Economic Outlook: Being the largest
economy in Southeast Asia, GDP is
expected to grow at a rate of 5.3% in 2019
and 5.4% in 2020, mainly due to investments
and exports. Indonesia’s economy
strengthened modestly in the third quarter of
2017 supported by higher commodity prices,
stronger global growth, rebounding
international trade, and relatively
accommodative monetary and financial
conditions.
▪ Investment Outlook: Investment in
Indonesia reached around USD 38.3 billion
in January-September 2018, up 13.2% from
total investment in the same period one year
ago. About 57% of the total investments
were towards island of Java. Majority of the
investments were into metal, machinery and
electronics industry as well as mining
sectors. Singapore is the largest investor,
followed by Japan and China.
Corruption, Inefficient government bureaucracy, Access to financing are considered to be the most problematic factors for
doing business in Indonesia
Note: Country ISO codes
IDN: Indonesia, CHN: China, IND: India, VNM: Vietnam, THA: Thailand

TRADE STATISTICS

16.8 16.2 16.1
11.2
10.1
0.0
5.0
10.0
15.0
20.0
China USA Japan Singapore India
Top Importing Markets for products exported by
Indonesia (in USD Billion) in 2017
0.2
0.2 0.1
0.2
0.1 0.1
0.0
0.1
0.2
0.3
Indonesia - Export and Import Statistics
(in USD Trillion)
Total Exports from Indonesia Total Imports into Indonesia
2015 2016 2017
Export & Import Trade Statistics
▪ The total untapped export potential for Indonesia (as an exporter) stands at around USD 67.5 billion. Crude Palm Oil, Palm Oil & Fractions
have an untapped export potential of about USD 3.2 billion and USD 6.3 billion respectively. About USD 2.6 billion worth of potential is
available for Technically specified natural rubber.
▪ Other potential products that are not completely exploited include Paper & Paper board products, Laminated woods like plywood,
Unwrought Tin, Coffee, Shrimps & Prawns.
▪ The markets with greatest potential for Indonesia’s exports are China, USA and India. China shows the largest absolute difference
between potential and actual exports in value terms, leaving room to realize additional exports worth USD 9.8 bn.
Source: International Trade Centre

Top Export Categories
Top 13 export categories contributes to about 70% of the total exports value from Indonesia
27.9
18.2
8.1
6.4
5.9
5.7
5.5
4.6
3.9
3.9
3.6
3.4
3.3
0.0 5.0 10.0 15.0 20.0 25.0 30.0
Mineral Fuel
Fats, Oils & Wax
Electrical Equipment
Precious Metals
Automobiles
Rubber & Rubber Products
Industrial Machinery
Footwear & Parts
Woven Apparel & Accessories
Wood & Wood Products
Ores, Slag & Ash
Paper & Paperboard
Knitted Apparel & Accessories
Top Export Categories from Indonesia
(Values in USD Billion) in 2017

5.4
4.9
3.5
3.0
2.6
0.0
2.0
4.0
6.0
China Japan India South Korea Singapore
Top Importers of HS 27 series (Mineral Fuel) from
Indonesia in USD billion in 2017
57.4
51.1
34.7
27.9
0.0
20.0
40.0
60.0
Export of HS 27 series (Mineral Fuel) from
Indonesia in USD billion
164, 11%
135, 9%
94, 6%
62, 4%
28, 2%1,006, 68%
World Export of HS 27 series (Mineral Fuel) in
USD billion in 2017
Saudi Arabia Russia USA Canada Indonesia Others
Top Exported Products in this Category
▪ Coal
▪ Petroleum gas
▪ Petroleum oils
▪ Lignite
▪ Petroleum coke
Mineral Fuel (1/2)
2014 2015 2016 2017

▪ Mineral Fuels category is the largest
export sector and contributes to about
19% of the total exports from Indonesia
▪ Being one of the largest producer and
exporter of Coal, production volume of
coal was about 255.7 million tons oil
equivalent in 2017 (ranking 5th in the
world’s production)
▪ Coal industry is fragmented with a few
big players and several small players
▪ Recently, government has modified
contracts with 13 coal mining companies
as part of a shift toward a new mining
permit system in order to boost
government revenues
Mineral Fuel (2/2)
Major Coal Reserves in Indonesia
Source: Indonesia Coal Mining Association, indonesia-investments.com, cekindo.com, pwc.com, worldmap.harvard.edu
Sumatra
South
Kalimantan
East Kalimantan
Central Kalimantan

3.5
2.7
1.3
1.0 1.0
0.0
1.0
2.0
3.0
4.0
India China Pakistan Netherlands USA
Top Importers of HS 15 series (Animal/ Vegetable
- Fats, Oils & Wax) from Indonesia in USD billion
in 2017
19.2
21.1
18.7 18.2
0.0
5.0
10.0
15.0
20.0
25.0
Export of HS 15 series (Animal/ Vegetable - Fats,
Oils & Wax) from Indonesia in USD billion
2014 2015 2016 2017
18, 21%
13, 15%
5, 6%
5, 5%
5, 5%
42, 48%
World Export of HS 15 series (Animal/ Vegetable -
Fats, Oils & Wax) in USD billion in 2017
Indonesia Malaysia Argentina Spain Netherlands Others
▪ Palm oil
▪ Coconut
▪ Margarine
Fats, Oils & Wax (Animal/ Vegetable) (1/2)

▪ Indonesia is the world’s largest producer
of Palm Oil and supplies to about more
than half of the world’s demand
▪ Indonesia’s palm oil production stood at
36 million metric tons in 2017 and
targeting to reach 40 million metric tons
by 2020
▪ Palm oil plantation ownership breakup:
Big state owned plantations (7%), Big
private plantations (53%) and Small
farmers (40%)
Fats, Oils & Wax (Animal/ Vegetable) (2/2)
Major Palm Oil Production Zones in Indonesia
Source: Indonesian Palm Oil Association, indonesia-investments.com, schusterinstituteinvestigations.org
Riau
North Sumatra
South Sumatra
East Kalimantan
Central Kalimantan
West Kalimantan

1.6
1.2
1.1
0.4 0.4
0.0
1.0
2.0
Singapore USA Japan China Malaysia
Top Importers of HS 85 series (Electrical
Equipment) from Indonesia in USD billion in 2017
10.4
9.7
8.6 8.1
0.0
5.0
10.0
15.0
Export of HS 85 series (Electrical Equipment)
from Indonesia in USD billion
2014 2015 2016 2017
813, 35%
167, 7%
138, 6%134, 6%8, 0%
1,049, 46%
World Export of HS 85 series (Electrical
Equipment) in USD billion in 2017
China USA Germany South Korea Indonesia Others
▪ Insulated wire, cable "incl. coaxial cable" and other insulated
electric conductors
▪ Monitors and projectors
▪ Electrical apparatus for switching or protecting electrical
circuits, or for making connections to or in electrical circuits
(switches, relays, fuses, surge suppressors, plugs, sockets,
lamp holders and junction boxes)
Electrical Equipment (1/2)

▪ Having one of the largest and fast
growing client-base, about 235
companies operate in electronics
manufacturing sector in Indonesia
▪ About 6% of the total exports from
Indonesia is contributed by Electrical
Equipment sector
▪ Tax holiday for up to 20 years for
investors in industries such as
electronics and telecoms
▪ Indonesia’s electronics & components
industry grew at a CAGR of 6.4%
reaching USD 13 billion (Rp. 180 trillion)
in 2016
▪ The Indonesian Chamber of Commerce
& Industry (KADIN) estimates that half of
locally assembled electronic products are
made of foreign components. This,
combined with the rising demand for
electronics components (estimated to
continue to grow by 10% annually),
opens up lucrative opportunities for JVs
and technology partnerships with local
component producers.
Electrical Equipment (2/2)
Major Electrical Equipment Production Zones in Indonesia
Source: Indonesia Investment Coordinating Board, gbgindonesia.com, indonesiabriefing.com
Riau
West Java

99, 15%
84, 13%
57, 9%
42, 6%
6, 1%
364, 56%
World Export of HS 71 series (Precious Metals) in
USD billion in 2017
Switzerland China USA India Indonesia Others
2.2 2.1
0.7 0.6
0.2
0.0
1.0
2.0
3.0
Singapore Switzerland Japan China UAE
Top Importers of HS 71 series (Precious Metals)
from Indonesia in USD billion in 2017
2016
2.8
4.6
5.5
6.4
0.0
5.0
10.0
Export of HS 71 series (Precious Metals) from
2014 2015 2016 2017
▪ Articles of jewelry and parts
▪ Gold
▪ Waste and scrap of precious metal
Precious Metals (1/2)

▪ Indonesia ranks 5th in the global gold
production following China, Australia,
Russia and USA in 2017. Gold
production was 168.2 tons in 2017.
▪ Indonesia also produced 55.1 tons of
gold from fabricated old gold scrap in
2017, next to China and India in the
Asian region
▪ Gold Reserves in Indonesia increased to
79.31 tons in the second quarter of 2017
from 78.07 ton in the first quarter of 2017
▪ Jewelry consumption stood at 34.2 tons
in 2016 in Indonesia and demand for
jewelry fell by 10% year-on-year as a
weaker rupiah drives gold to a record
high
Precious Metals (2/2)
Major Gold Mine Production Zones in Indonesia
Source: GFMS Gold Survey 2017, tradingeconomics.com, ceicdata.com, indonesia-investments.com, southernarcminerals.com
Papua
SumbawaEast Java
North Sumatra
West Java
East Kalimantan
Aceh
North Maluku

1.5
0.8
0.5 0.5 0.4
0.0
1.0
2.0
Philippines Thailand Japan Saudi Arabia Malaysia
Top Importers of HS 87 series (Automobiles)
4.6
5.2 5.4
5.9
0.0
4.0
8.0
Export of HS 87 series (Automobiles) from
2014 2015 2016 2017
244, 18%
142, 11%
125, 9%
88, 7%
6, 0%
744, 55%
World Export of HS 87 series (Automobiles) in
USD billion in 2017
Germany Japan USA Mexico Indonesia Others
▪ Motor cars and other motor vehicles principally designed for
the transport of persons, incl. station wagons and racing cars
▪ Parts and accessories for tractors, motor vehicles for the
transport of ten or more persons
▪ Parts and accessories for motorcycles and bicycles and for
carriages for disabled persons
Automobiles (1/2)

▪ Indonesia is the 2nd largest car
manufacturing nation in the ASEAN
region. However, it accounts for 1/3rd of
total annual car sales in the region.
▪ Currently, Indonesia is primarily
dependent on foreign direct investment,
particularly from Japan, for the
establishment of onshore car
manufacturing facilities
▪ As on 2017, Indonesia's total installed
car production capacity stands at 2.2
million units per year
Automobiles (2/2)
Major Automobiles Production Zone in Indonesia
Source: indonesia-investments.com, statista.com
West Java

1.6
0.8
0.5
0.3
0.3
0.0
1.0
2.0
USA Japan China India South Korea
Top Importers of HS 40 series (Rubber & Rubber
Products) from Indonesia in USD billion in 2017
9.4
7.1
5.9 5.7
0.0
5.0
10.0
Export of HS 40 series (Rubber & Rubber
Products) from Indonesia in USD billion
2014 2015 2016 2017
19, 12%
16, 10%
13, 8%
12, 7%
6, 3%
98, 60%
World Export of HS 40 series (Rubber & Rubber
Products) in USD billion in 2017
China Germany USA Thailand Indonesia Others
▪ Natural rubber
▪ New pneumatic tires, of rubber
▪ Articles of apparel and clothing accessories, incl. gloves,
mittens and mitts, for all purposes, of vulcanized rubber
Rubber & Rubber Products (1/2)

▪ Indonesia is the 2nd largest producer of
rubber globally
▪ Industry is highly fragmented and about
85% of the rubber producers are small
holders, and contributes to around 81%
to the national output
▪ The regions Java and Sumatra are the
largest contributors to the tire market in
the county. It is projected that the
Indonesian tire market will grow at a
CAGR of approximately 13% during the
period 2015-2020.
Rubber & Rubber Products (2/2)
Major Rubber Production Zones in Indonesia
Source: indonesia-investments.com, businesswire.com
Riau
North Sumatra
South Sumatra
West Kalimantan
Jambi

1.1
0.6 0.6
0.5
0.3
0.0
0.5
1.0
1.5
Singapore USA Japan Thailand Germany
Top Importers of HS 84 series (Industrial
Machinery) from Indonesia in USD billion in 2017
6.0 6.0
5.2
5.5
0.0
4.0
8.0
Export of HS 84 series (Industrial Machinery)
2014 2015 2016 2017
344, 18%
223, 12%
191, 10%
124, 7%
5, 0%
994, 53%
World Export of HS 84 series (Industrial
Machinery) in USD billion in 2017
China Germany USA Japan Indonesia Others
▪ Printing machinery used for printing by means of plates,
cylinders
▪ Machinery, plant or laboratory equipment whether or not
electrically heated
▪ Refrigerators, freezers and other refrigerating or freezing
equipment
Industrial Machinery (1/2)

▪ Indonesia has around 250 electronics
and component manufacturers in the
country
▪ International brands dominate the higher
end digital electronics sector mainly
through joint ventures with local
manufacturers (import components and
assemble the products) such as LCD
televisions, air conditioning units and
refrigerators for both the local market and
exports
▪ Major international brands are well
established throughout the country with
distribution networks via both modern
and traditional retail networks
Industrial Machinery (2/2)
Major Machinery Production Zones in Indonesia
Source: gbgindonesia.com, indonesia-investments.com, thejakartapost.com, indonesiabriefing.com
Riau
West Java

1.3
0.4 0.3 0.3 0.3
0.0
1.0
2.0
USA China Belgium Germany Japan
Top Importers of HS 64 series (Footwear &
Accessories) from Indonesia in USD billion in
2017
3.9 4.1
4.5 4.6
0.0
5.0
10.0
Export of HS 64 series (Footwear & Accessories)
2014 2015 2016 2017
47, 35%
18, 14%
11, 8%
6, 4%
5, 3%
48, 36%
World Export of HS 64 series (Footwear &
Accessories) in USD billion in 2017
China Vietnam Italy Germany Indonesia Others
▪ Footwear with outer soles of rubber, plastics, leather or
composition leather and uppers of leather
▪ Footwear with outer soles of rubber, plastics, leather or
composition leather and uppers of textile materials
▪ Footwear with outer soles and uppers of rubber or plastics
Footwear & Accessories (1/2)

▪ Footwear recorded robust value growth
of 7% in 2018 due to growing demand for
high-quality and sophisticated products,
provided by many new domestic brands
such as Buccheri.
▪ Sepatu Bata Tbk Pt led footwear industry
in 2018 with a value share of 4% and
sales of IDR1.4 trillion. Bata is a
longstanding brand in Indonesia and has
a large number of stores, even in remote
areas of the country.
▪ Indonesia ranks 6th is the export of
footwear, globally
▪ Main concern for this sector is the import
need of several raw materials (leather
and rubber) for the production of shoes.
Despite being a major rubber producer
Indonesia still needs to import rubber for
the manufacturing of shoes as the
country lacks domestic processing
facilities.
Footwear & Accessories (2/2)
Major Footwear Production Zones in Indonesia
Source: Indonesian Footwear Association, euromonitor.com, indonesia-investments.com, worldfootwear.com, gbgindonesia.com, aprisindo.or.id
East Java
West Java

72, 33%
16, 7%
13, 6%
12, 6%4, 2%
99, 46%
World Export of HS 62 series (Woven Apparel &
China Bangladesh Vietnam Italy Indonesia Others
1.9
0.4 0.3
0.1 0.1
0.0
1.0
2.0
3.0
USA Japan Germany South Korea Australia
Top Importers of HS 62 series (Woven Apparel &
2017
3.9 3.9 4.0 3.9
0.0
2.5
5.0
Export of HS 62 series (Woven Apparel &
Accessories) from Indonesia in USD billion
2014 2015 2016 2017
▪ Women's or girls' suits, ensembles, jackets, blazers, dresses,
skirts, divided skirts, trousers, bib and brace overalls,
breeches and shorts
▪ Men's or boys' suits, ensembles, jackets, blazers, trousers, bib
and brace overalls, breeches and shorts
▪ Women's or girls' blouses, shirts and shirt-blouses
Woven Apparel & Accessories (1/2)

▪ Textile and apparel industry in Indonesia
is currently employing over 3 million
people, accounting for over 17% of
employment in the manufacturing sector
▪ Specialty products such as Indonesian
batik cloth and other traditional or cultural
Indonesian fabrics are currently high
demand which is contributing to the
country’s surge in textiles exports
▪ Government has set the target to
increase the nation’s value of exported
textile and apparel to USD 75 billion by
the year 2030, and obtain about 5%
share in the global market
Woven Apparel & Accessories (2/2)
Major Apparel Production Zones in Indonesia
Source: businesswire.com, bizvibe.com
Sumatra
Jakarta
Java Bali

0.9
1.0
0.3
0.2 0.2
0.9 0.8
0.4
0.3
0.2
0.8 0.8
0.3 0.3
0.2
0.0
0.5
1.0
1.5
China Japan USA South Korea Australia
Top Importers of HS 44 series (Wood & Wood
Products) from Indonesia in USD billion in 2017
2014 2015 2016
3.6
4.1 4.0 3.9
0.0
2.5
5.0
Export of HS 44 series (Wood & Wood Products)
2014 2015 2016 2017
14, 11%
13, 10%
9, 7%
8, 6%
4, 3%
80, 63%
World Export of HS 44 series (Wood & Wood
Products) in USD billion in 2017
China Canada USA Germany Indonesia Others
▪ Plywood, veneered panel and similar laminated wood
▪ Wood, incl. strips and friezes for parquet flooring, not
assembled, continuously shaped "tongued, grooved, rebated,
chamfered, V-jointed beaded, moulded, rounded or the like"
along any of its edges, ends or faces, whether or not planed,
sanded or end-jointed
▪ Builders' joinery and carpentry, of wood, incl. cellular wood
panels, assembled flooring panels, shingles and shakes, of
wood
Wood & Wood Products (1/2)

▪ Indonesia contributes to about 3% of the
global wood exports
▪ Indonesia has three categories of forest
land: Conservation Forests, Protection
Forests, and Production Forests. More
than half of the Indonesian forest area is
production forest.
▪ Commonly harvested species for the
timber industry include: Meranti, Keruing,
Kapur, Mersawa, and Teak from
plantations
Wood & Wood Products (2/2)
Major Wood Processing Zones in Indonesia
Source: International Tropical Timber Organization, samkotimber.com, timbertradeportal.com
Sumatra
Java
Sulawesi
East Kalimantan

1.3
0.7 0.6
0.5
0.4
0.0
1.0
2.0
Japan Philippines China India South Korea
Top Importers of HS 26 series (Ores, Slag & Ash)
6.5
1.9
3.4 3.6
0.0
5.0
10.0
Export of HS 26 series (Ores, Slag & Ash) from
2014 2015 2016 2017
49, 31%
16, 10%
15, 9%12, 8%4, 2%
63, 40%
World Export of HS 26 series (Ores, Slag & Ash)
in USD billion in 2017
Australia Brazil Chile Peru Indonesia Others
▪ Copper ores and concentrates
▪ Iron ores and concentrates, incl. roasted iron pyrites
▪ Niobium, tantalum, vanadium or zirconium ores and
concentrates
Ores, Slag & Ash (1/2)

▪ The Grasberg mine, located in the
highlands of Indonesia's Papua province,
is the world’s second-largest copper
mine
▪ In January 2017, government imposed a
ban of the export of semi-processed
metal ore concentrates and hence
miners halted Indonesian shipments of
copper concentrates. However, the ban
was lifted in March 2017 with a condition
that over the next five years miners will
be permitted to export mineral ore,
including nickel ore, bauxite and
concentrates of other minerals, provided
they can show progress toward smelter
development.
▪ Subsequently, Phoenix-based Freeport
has agreed to give a 51% ownership in
the mine to Indonesia. It gains
operational control of the mine until 2041
in return.
Ores, Slag & Ash (2/2)
Major Copper Production Zones in Indonesia
Source: mining-technology.com, ft.com, thebalance.com
Papua
Sumbawa
Sumatra

0.4
0.3
0.2
0.2
0.2
0.0
0.5
Japan USA Malaysia Vietnam India
Top Importers of HS 48 series (Paper &
Paperboard) from Indonesia in USD billion in
2017
3.8 3.7
3.6
3.4
0.0
2.5
5.0
Export of HS 48 series (Paper & Paperboard)
2014 2015 2016 2017
19, 13%
18, 11%
15, 10%
8, 5%
3, 2%
90, 59%
World Export of HS 48 series (Paper &
Paperboard) in USD billion in 2017
Germany China USA Sweden Indonesia Others
▪ Uncoated paper and paperboard, of a kind used for writing,
printing or other graphic purposes, and non-perforated punch
cards and punch-tape paper
▪ Toilet or facial tissue stock, towel or napkin stock and similar
paper for household or sanitary purposes, cellulose wadding
and webs of cellulose fibers
▪ Paper and paperboard, coated on one or both sides with
kaolin "China clay" or other inorganic substances
Paper & Paperboard (1/2)

▪ Indonesia ranks ninth in terms of biggest
global pulp producers and sixth in terms
of biggest paper producers
▪ Approximately 60% of domestic pulp and
paper output is shipped to Indonesia’s
export destinations
▪ Demand for paper is expected to stay
strong in Southeast Asian nations as well
as in the USA. Likewise, Indonesia’s
domestic paper consumption is still low
at 32.6 kilogram per capita per year and
therefore has much room for further
growth. Indonesia’s paper consumption
is below the ASEAN average of 55
kilogram per capita, per year.
Paper & Paperboard (2/2)
Major Paper Production Zones in Indonesia
Source: asiapulppaper.com, indonesia-investments.com
West Java
Riau
East Java
Jambi

1.7
0.3
0.2
0.1 0.1
0.0
1.0
2.0
USA Japan Germany South Korea UK
Top Importers of HS 61 series (Knitted Apparel &
2017
3.5 3.4 3.3 3.3
0.0
2.5
5.0
Export of HS 61 series (Knitted Apparel &
Accessories) from Indonesia in USD billion
2014 2015 2016 2017
74, 34%
16, 8%
12, 5%9, 4%3, 2%
104, 47%
World Export of HS 61 series (Knitted Apparel &
China Bangladesh Vietnam Turkey Indonesia Others
▪ Jerseys, pullovers, cardigans, waistcoats
▪ Women's or girls' suits, ensembles, jackets, blazers, dresses,
skirts, divided skirts, trousers, bib and brace overalls,
breeches and shorts
▪ T-shirts, singlets and other vests
Knitted Apparel & Accessories (1/2)

▪ Although Indonesia produces cotton,
textile manufacturers prefer to import
cotton from abroad - particularly the
USA, Australia and India - because the
quality of foreign cotton is much higher
while the domestic cotton supply is highly
volatile (there often occur supply
shortages)
Knitted Apparel & Accessories (2/2)
Major Apparel Production Zones in Indonesia
Source: businesswire.com, bizvibe.com
Sumatra
Jakarta
Java Bali

TRADE AGREEMENTS

Indonesia – Trade Agreements
Agreements Region/ Countries Involved
Asia
ASEAN Free Trade Area (AFTA), ASEAN - Australia - New Zealand, ASEAN – China, ASEAN –
India, ASEAN – Japan, ASEAN – South Korea, Japan – Indonesia
Other Trade Agreements
Other Agreements Global System of Trade Preferences among Developing Countries (GSTP)
Source: World Trade Organization
Indonesia has 8 RTAs. Early announcements has been made for 2 RTAs (EFTA – Indonesia and EU – Indonesia)

Study on Sourcing Opportunities in Indonesia

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Study on Sourcing Opportunities in Indonesia